Interim report January-March 2017

Transcription

1 (All values in brackets refer to the corresponding period in 2016 and Poggenpohl is recognised as discontinued operations, see page 6.) January-March 2017 Net sales for the first quarter amounted to SEK 3,315 million (3,091), negatively impacted by currency effects of SEK 85 million. Organic growth was 10 per cent (3). Operating profit amounted to SEK 273 million (245), corresponding to an operating margin of 8.2 per cent (7.9). Currency losses had an impact of approximately SEK 30 million on operating profit, of which a negative SEK 5 million in translation effects and a negative SEK 25 million in transaction effects. Profit after tax amounted to SEK 205 million (171), corresponding to earnings per share of SEK 1.22 (1,02). Operating cash flow amounted to SEK 101 million (78). Nobia Group summary Change, % /2017 Change, % Net sales, SEK m 3,091 3, ,648 12,872 2 Gross margin, % Operating margin before depreciation and impairment, % Operating profit (EBIT), SEK m ,298 1,326 2 Operating marign, % Profit after financial items, SEK m ,247 1,276 2 Profit/loss after tax, SEK m Profit/loss after tax excluding IAC, SEK m Earnings/loss per share, after dilution, SEK Earnings/loss per share, after dilution excluding IAC, SEK Operating cash flow, SEK m ,031 1,054 2 Comments from the CEO Nobia s organic sales growth was 10 per cent in the first quarter, favourably impacted by more delivery days than in the preceding year and primarily driven by higher sales in the Nordic region. Our UK operations also grew in local currency, primarily as a result of temporarily high project deliveries, while consumer sales in Magnet declined. The UK kitchen market has weakened and price competition remains fierce. The Group s operating profit strengthened and operating margin for the past 12-month period amounted to 10.3 per cent. We are confident in our ambition to continue delivering profitable growth, both via our own initiatives and through acquisitions, says President and CEO Morten Falkenberg. 1

2 Consolidated net sales, earnings and cash flow Demand for kitchens in the Nordic region and Central Europe in the first quarter of 2017 is deemed to have improved year-on-year. In the UK, the kitchen market weakened as the result of heightened macroeconomic uncertainty. Sales increased organically 10 per cent (3), primarily as the result of increased sales values, higher volumes and more delivery days than in the preceding year. Currency losses of SEK 85 million (losses: 102) impacted sales. The gross margin declined to 38.9 per cent (39.3), adversely affected by currency fluctuations and a changed sales mix. Operating profit improved, positively impacted by higher sales values and increased volumes, and negatively affected by higher costs. The return on operating capital was 33.0 per cent in the past twelvemonth period (Jan-Dec 2016: 32.5). The return on equity was 14.0 per cent in the past twelve-month period (Jan-Dec 2016: 13.0). Operating cash flow improved mainly as a result of a positive change in working capital compared with the corresponding quarter Nobia s investments in fixed assets amounted to SEK 56 million (56), of which SEK 19 million (14) pertained to store investments. Group net sales and operating margin SEK m Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Net sales, SEKm Operating margin excl IAC 12 months roll, % Operating margin 12 months roll, % % Analysis of net sales Jan-Mar % SEK m ,091 Organic growth of which Nordic region of which UK region 6 92 of which CE region -2-2 Currency effect Sales to Hygena ,315 Currency effect on operating results Translationeffect Transactioneffect Total effect SEK m Jan-Mar Jan-Mar Jan-Mar Nordic region UK region CE region Group Net sales and profit by region Nordic UK Central Europe Group-wide and eliminations Group Jan-Mar Jan-Mar Jan-Mar Jan-Mar Jan-Mar SEK m Change, % Net sales from external customers 1,397 1,672 1,578 1, ,091 3,315 7 Net sales from other regions Net sales 1,398 1,672 1,578 1, ,091 3,315 7 Gross profit ,215 1,291 6 Gross margin, % Operating profit/loss Operating margin, % Net financial items Profit after financial items

3 Nordic region January-March 2017 The Nordic kitchen market grew year-on-year. The increase in newbuilds remained the primary driver for the positive trend. Net sales amounted to SEK 1,672 million (1,398). Organic growth was 16 per cent (4). Currency gains of SEK 50 million (losses: 37) impacted net sales for the quarter. Gross profit amounted to SEK 671 million (548) and the gross margin to 40.1 per cent (39.2). Operating profit amounted to SEK 212 million (163) and the operating margin was 12.7 per cent (11.7). Currency gains totalling about SEK 5 million impacted operating profit, of which SEK 5 million in translation effects and SEK 0 million in transaction effects. Comments on performance Organic growth was primarily attributable to increased sales to the project segment and positively impacted by more delivery days compared with Sales grew in all markets in the project segment, with the highest increase noted in Sweden, Norway and Denmark. Growth in consumer sales mainly referred to Sweden and Norway, although sales in Denmark also increased. The improvement in gross margin was mainly driven by higher sales values and lower prices of materials, which was partly offset by a negative sales mix. The improvement in operating profit was the result of higher sales volumes and increased sales values, which offset higher costs. The recall of fittings for top cabinets using the K21 suspension system is progressing according to plan. The costs for this were charged to ongoing earnings. HTH launched a new kitchen concept in Denmark on March 6, HTH GO is a range of popular kitchen models that are delivered ready-toassemble. The concept was introduced to HTH s Danish stores and has its own online platform. The initial consumer reception was positive. Share of consolidated net sales, first quarter Store trend, Jan-Mar % Renovated or relocated Newly opened/closed, net -3 Number of own kitchen stores 48 Net sales and operating margin SEK m % Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Net sales, SEK m Operating margin excl IAC 12 months roll, % Operating margin 12 months roll, % 0 Our brands 3

4 UK region January-March 2017 The UK kitchen market is deemed to have weakened due to heightened macroeconomic uncertainty. Net sales amounted to SEK 1,527 million (1,578). Organic growth was 6 per cent (2). Currency losses of SEK 137 million (losses: 63) impacted net sales for the quarter. Gross profit amounted to SEK 570 million (621) and the gross margin to 37.3 per cent (39.4). Operating profit amounted to SEK 96 million (111) and the operating margin was 6.3 per cent (7.0). Currency losses totalling about SEK 35 million impacted operating profit, of which a negative SEK 10 million in translation effects and a negative SEK 25 million in transaction effects. Comments on performance Organic growth was primarily due to higher project sales. Commodore and CIE had high deliveries during the first quarter. Magnet s sales decreased slightly, due to lower sales to the consumer segment (Retail). Also B2B sales declined. The gross margin declined, mainly due to negative currency effects and a changed sales mix, which was only partly offset by higher sales values. The decline in operating profit was primarily attributable to the lower gross margin and increased costs. Kitchen deliveries under private label to one of Nobia s B2B customers will be gradually phased out during the year. Share of consolidated net sales, first quarter Store trend, Jan-Mar % Renovated or relocated Newly opened/closed, net 0 Number of own kitchen stores 212 Net sales and operating margin SEK m % Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Net sales, SEK m Operating margin excl IAC 12 months roll, % Operating margin 12 months roll, % 0 Our brands 4

5 Central Europe region January-March 2017 Nobia s market in the Central European region is deemed to have grown slightly year-on-year. Net sales amounted to SEK 116 million (117). Organic growth was a negative 2 per cent (pos: 5). Currency gains of SEK 2 million (losses: 1) impacted net sales for the quarter. Gross profit amounted to SEK 36 million (36) and the gross margin to 31.0 per cent (30.8). Operating profit amounted to SEK 4 million (5) and the operating margin was 3.4 per cent (4.3). Currency effects totalling about SEK 0 million impacted operating profit, of which SEK 0 million in translation effects and SEK 0 million in transaction effects. Share of consolidated net sales, first quarter 4% Comments on performance The organic sales decline in Nobia s Austrian operations was due to lower sales volumes. The gross margin improved slightly, mainly as a result of higher sales values. Operating profit declined as a result of lower sales volumes and increased costs related to a modernized production line. On 19 December 2016, Nobia agreed the sale of Poggenpohl to the German Group Adcuram and in connection with this, Poggenpohl was reclassified as discontinued operations. The divestment of Poggenpohl was completed on 31 January 2017, see page 6. Net sales and operating margin SEK m 160 % Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Net sales, SEKm Operating margin excl items aff comp 12 months roll, % Operating margin 12 months roll, % 0 Our brands 5

6 Other information Financing Net debt including pension provisions amounted to SEK 396 million (768) at the end of the first quarter. The debt/equity ratio was 11 per cent (20) at the end of the period. Existing loan facilities on 31 March 2017 amounted to SEK 1,800 million, of which SEK 1,000 million comprised a syndicated bank loan expiring in 2019, and SEK 800 million comprised a bond loan from AB SEK Securities (Swedish Export Credit Corporation) expiring at the end of May The bank loan of SEK 1,000 million was unutilised at the end of the period. Net financial items amounted to an expense of SEK 10 million (expense: 11). Net financial items include the net of returns on pension assets and interest expense on pension liabilities corresponding to an expense of SEK 6 million (expense: 5). The net interest expense amounted to SEK 4 million (expense: 6). Corporate acquisitions and divestments Nobia announced on 19 December 2016 that it had agreed with German group Adcuram to divest the German luxury kitchen manufacturer Poggenpohl for a cash consideration corresponding to an equity value of EUR 10 million, subject to customary closing day adjustments. In connection with this, Poggenpohl was reclassified as Divested operations in accordance with IFRS 5. On 31 January 2017, Nobia completed the divestment of Poggenpohl, after gaining approval from the competition authorities in Germany and Austria. Nobia thus received a cash consideration of approximately EUR 10 million and payment of an internal loan of about EUR 8 million. Earnings from discontinued operations From the fourth quarter of 2016, Poggenpohl s operations are reported as discontinued operations in accordance with IFRS 5. The full-year 2015 and the period January- September 2016 have been restated with regard to the income statement, organic growth, specification of items affecting comparability, cash-flow statement and comparative data per region. These restatements are presented as an appendix to the year-end report available on the Nobia website under Investor Relations and Reports and presentations. Loss after tax from discontinued operations during the first quarter of 2017 amounted to SEK 0 million, of which SEK 0 million pertained to Poggenpohl and SEK 0 million pertained to stores acquired from franchisees with the intention of subsequently selling on. Loss after tax for discontinued operations for the first quarter of 2016 amounted to SEK 11 million, of which a loss of SEK 14 million pertained to Poggenpohl, a profit of SEK 5 million pertaining to the dissolution of a provision related to the divestment of Hygena and a loss of SEK 2 million was related to the stores acquired from franchisees with the intention of subsequently selling on. Return on shareholders equity and operating capital % Jan-Dec 15 Jan-Dec 16 Apr-Mar 16/17 Return on shareholders equity, % Return on operating capital, % Net debt and net debt/equity ratio SEK m % Mar Mar Mar 17 Net debt, SEK m Net debt/equity ratio, % 0 6

7 At the end of 2016, Nobia had two stores reported as Discontinued operations and disposal group held for sale, in accordance with IFRS 5. In the first quarter of 2017, no change occurred. On 31 March 2017, Nobia had one store in Denmark and one store in Sweden, a total of two stores, recognised in accordance with IFRS 5. Items affecting comparability Nobia recognises items affecting comparability separately to distinguish the performance of the underlying operations. Items affecting comparability refer to items that affect comparisons insofar as they do not recur with the same regularity as other items. No items affecting comparability ( ) were recognised for the period January-March Personnel The number of employees at the end of the period was 6,106 (6,618). The decline in the number of employees was mainly attributable to the divestment of Poggenpohl. On 31 December 2016, Poggenpohl had 481 employees. Annual General Meeting Nobia s Annual General Meeting was held on 6 April 2017 in Stockholm. The Annual General Meeting approved the proposed dividend to shareholders for 2016 of SEK 3.00 per share, totalling approximately SEK 505 million. The dividend was paid on 13 April. The Annual General Meeting resolved on the number of Board members as nine and re-elected the Board members Tomas Billing, Morten Falkenberg, Lilian Fossum Biner, Nora Førisdal Larssen, Stefan Jacobsson, Ricard Wennerklint and Christina Ståhl. Jill Little and George Adams were elected as new Board members. Tomas Billing was re-elected as Chairman. The accounting firm Deloitte AB was elected as the new auditors until the next Annual General Meeting, with Daniel de Paula as auditor-in-charge. The Annual General Meeting appointed a Nomination Committee comprising Viveca Ax:son Johnson (Chair), representing Nordstjernan, Torbjörn Magnusson, representting If Skadeförsäkring, Lars Bergkvist, representing Lannebo fonder, and Arne Lööw, representing the Fourth Swedish National Pension Fund, for the period until the close of the next Annual General Meeting in The Annual General Meeting resolved on the introduction of a Performance Share Plan in accordance with the Board s proposal. The plan includes approximately 100 people, comprising senior executives and people in senior management positions. Participation in the plan involves, for example, a downward adjustment of the participant s maximum variable remuneration. Participants are allocated performance-based share rights which, after a threeyear vesting period, provide entitlement to shares, given that certain conditions are met, including a financial performance target. In view of the performance share plan, the Annual General Meeting resolved on the transfer of not more than 1,500,000 treasury shares to the plan participants. The Annual General Meeting authorised the Board of Directors, during the period prior to the next Annual General Meeting, to decide on the acquisition and transfer of treasury shares. A detailed description of the resolutions passed at the Annual General Meeting is available on the Nobia website. Transfer of treasury shares With support of the resolution passed by Nobia s Annual General Meeting, Nobia will transfer 110,419 shares to participants in the 2014 Performance Share Plan following publication of the interim report for the first quarter of The 2014 Performance Share Plan encompassed approximately 100 senior executives and was based on participants investing in Nobia shares that were locked into the plan. Each Nobia share invested in under the framework of the plan entitled participants, following a vesting period of approximately three years and provided that certain conditions were fulfilled, to allotment of matching and performance shares in Nobia. Since the targets established for the 2014 plan were met, both performance and matching shares will be allocated. The transfer will be made free-of-charge. At 31 March 2017, Nobia s holding of treasury shares amounted to 6,819,990 shares. Following the transfer of shares under the 2014 Performance Share Plan, Nobia s holding of treasury shares will amount to 6,709,571 shares. Significant risks in the Group and Parent Company Nobia is exposed to strategic, operating and financial risks, which are described on pages of the 2016 Annual Report. During the first quarter of 2017, demand in the Nordic region and Central Europe is deemed to have improved, compared year-on-year. The kitchen market in the UK is deemed to have weakened due to increased macro-economic uncertainty. Nobia continues to capitalise on synergies and economies of scale by harmonising the product range, co-ordinating production and enhancing purchasing efficiency. Nobia s balance sheet as at 31 March 2017 contained goodwill of SEK 2,349 million (2,461). The value of this asset item is tested if there are any indications of a decline in value and at least once annually. Stockholm, 28 April 2017 Morten Falkenberg President and CEO Nobia AB, Corporate Registration Number This interim report is unaudited. 7

8 Condensed consolidated income statement SEK m /17 Net sales 3,091 3,315 12,648 12,872 Cost of goods sold -1,876-2,024-7,715-7,863 Gross profit 1,215 1,291 4,933 5,009 Selling and administrative expenses ,019-3,682-3,725 Other income/expenses Operating profit ,298 1,326 Net financial items Profit/loss after financial items ,247 1,276 Tax Profit/loss after tax from continuing operations ,001 Profit/loss from discontinued operations, net after tax Profit/loss after tax Total profit attributable to: Parent Company shareholders Non-controlling interests Total profit/loss Total depreciation¹ Total impairment¹ 0 0 Gross margin, % Operating margin, % Return on operating capital, % Return on shareholders equity, % Earnings per share before dilution, SEK Earnings per share after dilution, SEK Number of shares at period end before dilution, 000s 3 168, , , ,473 Average number of shares before dilution, 000s 3 168, , , ,473 Number of shares after dilution at period end, 000s 3 168, , , ,704 Average number of shares after dilution, 000s 3 168, , , ,700 1 Excluding depreciation and impairment recognised on the line Profit/loss from discontinued operations, net after tax. 2 Earnings per share attributable to the Parent Company shareholders. 3 Excluding treasury shares. 8

9 Consolidated statement of comprehensive income SEK m /17 Profit/loss after tax Other comprehensive income Items that may be reclassified subsequently to profit or loss Exchange-rate differences attributable to translation of foreign operations Cash flow hedges before tax Tax attributable to change in hedging reserve for the period Items that will not be reclassified to profit or loss Remeasurements of defined benefit pension plans Tax relating to remeasurements of defined benefit pension plans Other comprehensive income/loss Total comprehensive income/loss Total comprehensive income/loss attributable to: Parent Company shareholders Non-controlling interests Total comprehensive income/loss

10 Condensed consolidated balance sheet 31 Mar 31 Dec SEK m ASSETS Goodwill 2,461 2,349 2,359 Other intangible fixed assets Tangible fixed assets 1,684 1,367 1,384 Long-term receivables, interest-bearing (IB) Long-term receivables Deferred tax assets Total fixed assets 4,531 4,031 4,076 Inventories Accounts receivable 1,396 1,529 1,240 Current receivables, interest-bearing (IB) Other receivables Total current receivables 1,836 1,902 1,561 Cash and cash equivalents (IB) 804 1,243 1,005 Assets held for sale Total current assets 3,620 4,044 3,929 Total assets 8,151 8,075 8,005 SHAREHOLDERS' EQUITY AND LIABILITIES Share capital Other capital contributions 1,478 1,483 1,481 Reserves Profit brought forward 2,478 2,366 2,133 Total shareholders' equity attributable to Parent Company shareholders 3,810 3,600 3,415 Non-controlling interests 4 4 Total shareholders' equity 3,814 3,600 3,419 Provisions for pensions (IB) Other provisions Deferred tax liabilities Other long-term liabilities, interest-bearing (IB) Total long-term liabilities 1,814 1,052 1,063 Current liabilities, interest-bearing (IB) Current liabilities 2,513 2,621 2,393 Liabilities attributable to assets held for sale Total current liabilities 2,523 3,423 3,523 Total shareholders' equity and liabilities 8,151 8,075 8,005 BALANCE-SHEET RELATED KEY RATIOS Equity/assets ratio, % Debt/equity ratio, % Net debt, closing balance, SEK m Operating capital, closing balance, SEK m 4,582 3,996 3,912 Capital employed, closing balance, SEK m 5,393 5,244 5,182 10

11 Statement of changes in consolidated shareholders equity Attributable to Parent Company shareholders SEK m Share capital Other capital contributions Exchange-rate differences attributable to translation of foreign operations Cash-flow hedges after tax Profit brought forward Total Noncontrolling interests Total shareholders equity Opening balance, 1 January , ,361 3, ,822 Profit/loss for the period Other comprehensive income/loss for the period Total comprehensive income for the period Dividend Allocation of share saving schemes Closing balance, 31 March , ,478 3, ,814 Opening balance, 1 January , ,133 3, ,419 Profit/loss for the period Other comprehensive income/loss for the period Total comprenhensive income/loss for the period Dividend Change in non-controlling interests -4-4 Allocation of share saving schemes Closing balance, 31 March , ,366 3,600 3,600 11

12 Condensed consolidated cash-flow statement SEK m /17 Operating activities Operating profit ,298 1,326 Operating profit/loss for discontinued operations Depreciation/Impairment Adjustments for non-cash items Tax paid Change in working capital Cash flow from operating activities ,281 1,310 Investing activities Investments in fixed assets Other items in investing activities Interest received Change in interest-bearing assets Acquisition of operations 0 0 Divestment of operations Cash flow from investing activities Operating cash flow before acquisition/divestment of operations, interest, increase/decrease of interest-bearing assets Total cash flow from operating and investing activities Financing activities ,031 1, , Interest paid Change in interest-bearing liabilities Dividend Cash flow from financing activities Cash flow for the period excluding exchange-rate differences in cash and cash equivalents Cash and cash equivalents at beginning of the period 765 1, Cash flow for the period Exchange-rate differences in cash and cash equivalents Cash and cash equivalents at period-end 804 1,243 1,266 1, No impairment was recognised during the period. 2 No impairment was recognised during the period. 3 Impairment amounted to SEK 332 million and pertained to land and buildings SEK 151 million, plant and machinery SEK 28 million, equipment, tools, fixtures and fittings SEK 47 million, kitchen displays SEK 46 million, goodwill SEK 58 million and other tangible assets SEK 2 million. 4 No repayment or raising of loans occurred during the period. 5 No repayment or raising of loans occurred during the period. 6 No repayment or raising of loans occurred during the period. 7 Of which SEK 261 million is recognised on the line Assets held for sale. 12

13 Analysis of net debt SEK m /17 Opening balance Acquisition of operations 0 0 Divestment of operations Translation differences Operating cash flow ,031-1,054 Interest paid, net Remeasurements of defined benefit pension plans Other change in pension liabilities Dividend Closing balance

14 Note 1 Accounting policies This interim report has been prepared in accordance with IFRS, with the application of IAS 34 Interim Financial Reporting. For the Parent Company, accounting policies are applied in accordance with Chapter 9, Interim Reports, of the Swedish Annual Accounts Act. Nobia has applied the same accounting policies in this interim report as were applied in the 2016 Annual Report. Note 2 References Segment information, page 2. Loan and shareholders equity transactions, page 6. Divestment of operations, pages 6 and 7. Items affecting comparability, page 7. Note 3 Financial instruments fair value The carrying amounts of the Group s financial assets and liabilities are recognised at amortised cost, corresponding to a reasonable approximateion of their fair values. Financial instruments measured at fair value in the balance sheet are forward agreements comprising assets at a value of SEK 18 million (31 Dec 2016: 9) and liabilities at a value of SEK 19 million (31 Dec 2016: 12). The measurement of these items is attributable to level 2 of the fair value hierarchy, meaning based on indirectly observable market data. The supplementary purchase consideration of SEK 53 million pertaining to the acquisition of Commodore and CIE is conditional upon the business performance and is valued at level 3 of the fair value hierarchy. During the fourth quarter of 2016, SEK 22 million was paid out. The remaining provision amounts to SEK 22 million restated at the applicable balance-sheet date. Note 4 Related-party transactions The Parent Company invoiced Group-wide services to subsidiaries in an amount of SEK 54 million (58) during the first quarter of The Parent Company reported a loss of SEK 1 million (0) from participations in Group companies. 14

15 Parent Company Condensed Parent Company income statement SEK m /17 Net sales Administrative expenses Operating loss Profit from shares in Group companies Other financial income and expenses Profit/loss after financial items Tax on profit/loss for the period Profit/loss for the period Parent Company balance sheet 31 Mar 31 Dec SEK m ASSETS Fixed assets Shares and participations in Group companies 2,085 1,377 1,469 Total fixed assets 2,085 1,377 1,469 Current assets Current receivables Accounts receivable Receivables from Group companies 2,845 2,910 2,868 Other receivables Prepaid expenses and accrued income Cash and cash equivalents Total current assets 3,470 3,885 3,868 Total assets 5,555 5,262 5,337 SHAREHOLDERS' EQUITY, PROVISIONS AND LIABILITIES Shareholders' equity Restricted shareholders' equity Share capital Statutory reserve 1,671 1,671 1,671 1,729 1,729 1,729 Non-restricted shareholders' equity Share premium reserve Buy-back of shares Profit brought forward 2,377 1,772 1,948 Profit/loss for the period ,018 1,411 1,430 Total shareholders' equity 3,747 3,140 3,159 Provisions for pensions Long-term liabilities Liabilities to credit institutes 800 Current liabilities Liabilities to credit institutes Accounts payable Liabilities to Group companies 960 1,240 1,276 Other liabilities Accrued expenses and deferred income Total current liabilities 993 2,106 2,162 Total shareholders' equity, provisions and liabilities 5,555 5,262 5,337 15

16 Comparative data per region Net sales, SEK m /17 Nordic 1,398 1,672 5,988 6,262 UK 1,578 1,527 6,122 6,071 Central Europe Group-wide and eliminations Group 3,091 3,315 12,648 12,872 Gross profit, SEK m /17 Nordic ,402 2,525 UK ,323 2,272 Central Europe Group-wide and eliminations Group 1,215 1,291 4,933 5,009 Gross margin, % /17 Nordic UK Central Europe Group Operating profit, SEK m /17 Nordic UK Central Europe Group-wide and eliminations Group ,298 1,326 Operating margin, % /17 Nordic UK Central Europe Group

17 Quarterly data per region Net sales, SEK m I II III IV I Nordic 1,398 1,626 1,355 1,609 1,672 UK 1,578 1,633 1,495 1,416 1,527 Central Europe Group-wide and eliminations Group 3,091 3,403 2,999 3,155 3, Gross profit, SEK m I II III IV I Nordic UK Central Europe Group-wide and eliminations Group 1,215 1,365 1,170 1,183 1, Gross margin, % I II III IV I Nordic UK Central Europe Group Operating profit, SEK m I II III IV I Nordic UK Central Europe Group-wide and eliminations Group Operating margin, % I II III IV I Nordic UK Central Europe Group

18 Reconciliation of alternative performance measures Nobia presents certain financial performance measures in the interim report that are not defined according to IFRS, known as alternative performance measures. Nobia believes that these measures provide valuable complementary information to investors and the company s management since they facilitate assessments of trends and the company s performance. Because not all companies calculate performance measures in the same way, these are not always comparable with those measures used by other companies. Consequently, the performance measures are not to be seen as replacements for measures defined according to IFRS. For definitions of the performance measures that Nobia uses, see pages Jan-Mar Analysis of net sales Nordic Region % SEK m ,397 Organic growth Currency effect ,672 Jan-Mar Analysis of net sales UK Region % SEK m ,578 Organic growth 6 92 Currency effect Sales to Hygena ,527 Jan-Mar Analysis of net sales Central Europe region % SEK m Organic growth -2-2 Currency effect Operating profit before depreciation and impairment, SEK m /17 Operating profit ,298 1,326 Depreciation and impairment Operating profit before depreciation and impairment ,585 1,608 Net sales 3,091 3,315 12,648 12,872 % of sales 10.4% 10.4% 12.5% 12.5% Profit/loss after tax excluding IAC, SEK m /17 Profit/loss after tax Items affecting comparability net after tax Profit/loss after tax excluding IAC

19 Reconciliation of alternative performance measures, cont. 31 Mar 31 Dec Net debt SEK m Provisions for pensions (IB) Other long-term liabilities, interest-bearing (IB) Current liabilities, interest-bearing (IB) Interest-bearing liabilities booked as liabilities attributable to assets held for sale (IB) 62 Interest-bearing liabilities 1,579 1,644 1,763 Long-term receivables, interest -bearing (IB) Current receivables, interest-bearing (IB) Interest-bearing assets booked as assets held for sale (IB) -261 Cash and cash equivalents (IB) ,243-1,005 Interest-bearing assets ,248-1,270 Net debt Mar 31 Dec Operating capital SEK m Total assets 8,151 8,075 8,005 Other provisions Deferred tax liabilities Current liabilities, non interest-bearing -2,513-2,621-2,393 Liabilities attributable to assets held for sale, non interest-bearing Non-interest-bearing liabilities -2,758-2,831-2,823 Capital employed 5,393 5,244 5,182 Interest-bearing assets ,248-1,009 Interest-bearing assets booked as assets held for sale (IB) -261 Operating capital 4,582 3,996 3,912 Jan-Dec Apr-Mar Average operating capital SEK m /17 OB Operating capital 4,596 4,582 OB Net operating assets discontinued operations CB Operating capital 3,912 3,996 CB Net operating assets discontinued operations 22-4 Average operating capital before adjustments of acquistion and divestments 3,998 4,016 Adjustment for acquisitions and divestments not occurred in the middle of the period 0 Average operating capital 3,998 4,016 Jan-Dec Apr-Mar Average equity SEK m /17 OB Equity attributable to Parent Company shareholders 3,818 3,810 CB Equity attributable to Parent Company shareholders 3,415 3,600 Average equity before adjustment of increases and decreases in capital 3,617 3,705 Adjustment for increases and decreases in capital not occured in the middle of the period Average equity 3,511 3,495 19

20 Definitions Performance measure Calculation Purpose Return on shareholders equity Return on operating capital Net profit for the period as a percentage of average shareholders equity attributable to Parent Company shareholders based on opening and closing balances for the period. The calculation of average shareholders equity has been adjusted for increases and decreases in capital. Operating profit as a percentage of average operating capital based on opening and closing balances for the period excluding net assets attributable to discontinued operations. The calculation of average operating capital has been adjusted for acquisitions and divestments. Return on equity shows the total return on shareholders capital in accounting terms and reflects the effects of both the operational profitability and financial gearing. The measure is primarily used to analyse shareholder profitability over time. Return on operating capital shows how well the operations use net capital that is tied up in the company. It reflects how both cost and capital-efficient net sales are generated, meaning the combined effect of the operating margin and the turnover rate of operating capital. Gross margin Gross profit as a percentage of sales. This measure reflects the efficiency of the part of the operations that is primarily linked to production and logistics. It is used to measure cost efficiency in this part of the operations. EBITDA Earnings before depreciation/amortisation and impairment. To simplify, the measure shows the earningsgenerating cash flow in the operations. It provides a view of the ability of the operations, in absolute terms, to generate resources for investment and payment to financers and is used for comparisons over time. Items affecting comparability Items that affect comparability in so far as they do not reoccur with the same regularity as other items. Reporting items affecting comparability separately clearly shows the performance of the underlying operations. Net debt Interest-bearing liabilities less interestbearing assets. Interest-bearing liabilities include pension liabilities. Net debt is used to monitor the debt trend and see the level of the refinancing requirement. The measure is used as a component in the debt/equity ratio. Operating capital Capital employed excluding interestbearing assets. Operating capital shows the amount of capital required by the operations to conduct its core operations. It is mainly used to calculate the return on operating capital. 20

21 Performance measure Calculation Purpose Operating cash flow Cash flow from operating activities including cash flow from investing activities, excluding cash flow from acquisitions/divestments of operations, interest received, increase/decrease in interest-bearing assets. This measure comprises the cash flow generated by the underlying operations. The measure is used to show the amount of funds at the company s disposal for paying financers of loans and equity or for use in growth through acquisitions. Organic growth Change in net sales, excluding acquisitions and changes in exchange rates. Organic growth facilitates a comparison of sales over time by comparing the same operations and excluding currency effects. Region Region corresponds to an operating segment under IFRS 8. Earnings per share Net profit for the period divided by a weighted average number of outstanding shares during the period. Operating margin Operating profit as a percentage of net sales. The measure reflects the operating profitability of the operations. It is used to monitor the flexibility and efficiency of the operations before taking into account capital tied up. The performance measure is used both internally in governance and monitoring of the operation, and for benchmarking with other companies in the industry. Debt/equity ratio Net debt as a percentage of shareholders equity including noncontrolling interests. A measure of the ratio. The measure shows the percentage of the loan capital in relation to capital invested by the owners, an is thus a measure of the financial strength but also the gearing effect of lending. A higher debt/equity ratio means a higher financial risk and higher financial gearing. Equity/assets ratio Capital employed Shareholders equity including noncontrolling interests as a percentage of balance-sheet total. Balance-sheet total less non-interestbearing provisions and liabilities. This measure reflects the company s financial position and thus its long-term solvency. A healthy equity ratio/strong financial position provides preparedness for managing periods of economic downturns and financial preparedness for growth. It also provides a minor advantage in the form of financial gearing. The capital that shareholders and lenders have placed at the company s disposal. It shows the net capital invested in the operations, such as operating capital, with additions for financial assets. 21

22 Performance measure Calculation Purpose Currency effects Translation effects refers to the currency effects arising when foreign results and balance sheets are translated to SEK. Transaction effects refers to the currency effects arising when purchases or sales are made in currency other than the currency of the producing country (functional currency). 22

23 Information to shareholders For further information Contact any of the following on +46 (0) or +46 (0) : Morten Falkenberg, President and CEO Kristoffer Ljungfelt, CFO Lena Schattauer, Head of Communication and Investor Relations Presentation The interim report will be presented on Friday, 28 April at 3:00 p.m. CET in a webcast teleconference that can be followed on Nobia s website. To participate in the teleconference, call one of the following numbers: From Sweden: +46 (0) From the UK: +44 (0) From the US: Financial calendar 21 July 2017 Interim report January-June October 2017 Interim report January-September 2017 This information is such that Nobia is obliged to made public pursuant to the EU s Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication, through the agency of the contact person set out above, on 28 April 2017 at 2:00 p.m. CET. Nobia develops and sells kitchens through some twenty strong brands in Europe, including Magnet in the UK; HTH, Norema, Sigdal, Invita, Marbodal in Scandinavia; Petra and A la Carte in Finland and Ewe, FM and Intuo in Austria. Nobia generates profitability by combining economies of scale with attractive kitchen offerings. The Group has approximately 6,000 employees and net sales of about SEK 13 billion. The Nobia share is listed on the Nasdaq Stockholm under the ticker NOBI. Website: Box Stockholm, Sweden Office address: Klarabergsviadukten 70 A5 Tel Fax Corporate Registration Number: Board domicile: Stockholm, Sweden 23